As entrepreneurs, investors, and others using business to tackle social challenges gather in San Francisco for the annual Social Capital Markets conference this week, they may be adding a new word to their vocabulary.
The word is “inculators” — shorthand for both incubators and accelerators. It appears in a report released Tuesday by the Unitus Seed Fund, a seed stage venture fund that invests in Indian startups, which partnered with Village Capital and the Global Accelerator Network to survey incubators.
The 2015 Global Best Practices Report on Incubation and Acceleration draws on 78 responses from 198 leading incubators contacted since March 2015. It aims to fill a void in knowledge about what makes incubators and accelerators effective, a question Devex Impact also examined last month. While efforts like the Global Accelerator Learning Initiative are underway, these latest results come at an opportune moment to examine what works — as the SOCAP conference launches.
“We determined we wanted to help standardize the nomenclature to help people understand where they fit in and compares apples to apples and oranges to oranges,” said Will Poole, managing partner at Unitus Seed Fund.
That is particularly challenging in a rapidly changing marketplace, where access to current information is both highly valued and hard to achieve. “Ten years ago, Y Combinator was a tiny startup; today it's said to be raising a multibillion-dollar fund. Accelerators are accelerating; to retain a competitive edge, they need all the info they can get now," Poole said.
The report also emphasizes the importance of engaged mentorship, the benefits of specializing in a particular sector and the need for even the most successful inculators to invest in marketing to attract the best entrepreneurs, Poole said.
Poole, who is also a managing partner at Capria — the first global accelerator for impact venture capitalists — said the report offers a few takeaways for the global development community, which is increasingly looking to inculator models to support entrepreneurs in emerging markets.
“I’d start by saying that there’s a huge number of inculators being created around the world and maybe there’s a bit of an oversupply of them and it’s going to be important for both entrepreneurs and funders to focus on the ones that are performing the best,” he said.
One key challenge is the lack of accountability in this sector — a number of organizations surveyed did not track, or chose not to report on, their success metrics, Poole said.
While he would not name the specific organizations included in the survey, the report lists respondents and supporters including Chinacellerator, The Unreasonable Institute, Microsoft Ventures, Agora Partnerships and Indian Angel Network.
“It’s important for an entrepreneur to know what they want to get out of a program,” he continued. “Where are they going in and where do they expect to be coming out? We’ve seen lots of cases where entrepreneurs are very nascent in their thinking and they go into a program and expect to come out with investors throwing money at them and it doesn’t happen and that’s obviously a failure of expectations. The better incubators are very selective about who they bring in and confident they can set them out having achieved the goals they set forward.”
Luni Libes, founder and managing director of the Seattle, Washington-based accelerator Fledge, whose “Fledglings” are split between Africa and North America, was one of the respondents.
Libes said that in person gatherings like the upcoming “Accelerating the Accelerators” event, are important for the field and last year it led to several epiphanies, including the need to get more entrepreneurs in leadership positions in the inculator space.
“The survey doesn’t see the edge cases that are working,” he said. He praised the work fellow SOCAP speaker Ross Baird is doing at Village Capital to solve global problems through entrepreneurship, but said the problem is that efforts like these do not always emerge in surveys looking for trends and averages. “The average results are not necessarily the best results.”
What seems to be taking off in the social impact space is the TechStars accelerator model of flooding entrepreneurs with mentors, Libes said.
“No one has replicated the Y Combinator formula because outside of Y Combinator it doesn’t actually work,” he said, referencing the guest speakers, office hours, and Demo Days Y Combinator is known for. “There’s magic pixie dust for Y Combinator because of where they’re based and because of the successes they’ve had. It works just fine in the Bay Area but if you pick it up and drop it off in the rest of the world it doesn’t work.”
With conversations like “Demystifying Accelerators” and “Measuring Impact: Social Incubator Benchmark Research” planned for SOCAP this week, attendees will be doing their best to figure out what the “magic pixie dust” is made of.
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Catherine Cheney covers the West Coast global development community for Devex. Since graduating from Yale University, where she earned bachelor's and master's degrees in political science, Catherine has worked as a reporter and editor for a range of publications including World Politics Review, POLITICO, and NationSwell, a media company and membership network she helped to build. She is also an ambassador for the Solutions Journalism Network and the Franklin Project at the Aspen Institute.
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